TaxTMI 
TaxTMI 
2019 (11) TMI 916
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....ollection contract. It filed its return of income on 26-03-2012 declaring total income of Rs. 29,22,560/-. During the assessment proceedings, the AO observed that certain members have introduced huge amount of capital for the business aggregating to Rs. 76,45,000/- and after calling for the assessee's explanation and seeking information from the members by invoking section 133(6) of the Act, he made addition of Rs. 76,45,000/- by treating the same as unexplained capital introduction earned from undisclosed sources of income. 3. Being aggrieved, the assessee carried the matter in appeal before he ld CIT(A) and filed various evidences like bank statements, confirmations, ITRs of the members in support of its claim and requested to entertain the same as additional evidence under Rule 46A of IT Rules, 1962. After considering the remand report from the AO, deleted the addition to the extent of Rs. 44,45,000/- but confirmed the addition of Rs. 32 lacs by holding that source and genuineness of transaction remains unexplained. Against the said findings, the assessee is now in appeal before us. 4. During the course of hearing, the ld AR submitted that the assessee AOP was originally c....
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....lable in the nearby towns and he being a prudent businessman would not keep the huge cash idle at home. Further the said creditor claimed to have given the amount out of agricultural income but no income from agricultural operation has been declared in the ITR. His confirmation is enclosed. In remand proceedings he was produced for verification and his statement was recorded in which he accepted to have given amount of Rs. 15 lacs in cash. The source of same was explained to be out of old savings, contract receipts, income from property dealing and family agricultural income. In the statement he explained the fact of having agricultural land of 145 bigha in his name as well in the name of family members in support of which land documents were also filed. He is regularly assessed to tax. During the year he filed the return declaring an income of Rs. 5,96,770/-. He is having capital of Rs. 1,08,19,601/- as on 31- 03-201 which proves his creditworthiness. He has shown the investment in assessee AOP in his Balance Sheet. Hence, the capital contribution of Rs. 15,00,000/- received from him is fully explained. The assessee has not shown the agricultural income in his return as it is t....
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....tor mechanic from last 12 years having a workshop along with Iqbal at Sikar. He earns about Rs. 13,000/- per month, live in his own house, has simple life style and house hold expenses are about Rs. 5,000/- p.m. In support of the same he has filed an affidavit. His confirmation is at. Thus, the source of capital contribution is fully explained. The opening balance is Rs. 3 lacs and no addition has been made in the assessment of earlier years. Hence, no addition can be made in the year under consideration. Rs. 32,00,000/- 5. It was submitted by the ld AR that from the above table, it can be noted that the assessee has discharged its onus by furnishing adequate evidence, return of income and the affidavits of the members confirming the contributions made by them. Only in case of Yoginder Singh Chouhan, the assessee could not produce confirmation due to differences and disputes but the fact that he has overdrawn his capital a/c by Rs. 90,69,542/- in itself is a testimony of the fact that he introduced capital of Rs. 13 lacs in the year under consideration. Further, reliance was placed on the following cases:- • Aravali Trading Co. Vs. I....
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....unt of Yogender Singh Chouhan and credited in the OBC bank account. Date Voucher No. Amount 25/02/2011 1999 65,14,342 2000 25,21,817 Latter on 09/03/2011 an amount of Rs. 38,45,000/- credited in the account of Yoginder singh Chouhan and debited the OBC bank account through voucher No. 375. Copy of mission, Ledger account statement of Yogindra Singh Chouhan, OBC ledger account & bank account statement, day book and certificate issued by OBC bank, Bikaner are enclosed for your kind perusal." On perusal of the AO's report, I find that the amount of Rs. 38,45,000/-was not capital contribution, this was the money credited to his account on cancellation of demand draft issued from appellant AOP on 25/02/211 and 26/02/2011 in favour of Mining Department for getting Royalty contracts in his own name. Further it was stated that Sh. Yogender Singh Chohan is one of the member of appellant AOP and equally liable to tax proceedings. In such circumstances, the genuineness of cash transaction worth Rs. 13,00,000/-remained unexplained; however addition of Rs. 38,45,000/- stands explained. Thus, the addition of Rs. 13,00,000/- is herby upheld ....
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....ewith." It was stated before the AO that the amount of Rs. 15 was given in cash out of business savings and family's agriculture income kept at home. However, I find no force in this contention as the bank facilities were available in the nearby towns and he being a prudent businessman would not keep the huge cash idle at home. Further the said creditor claimed to have given out of agriculture income but no income from agriculture operation has been declared in the ITR. In this regard, I am of view that the capital introduced in cash by Sh. Bhanwar Singh was nothing but his undisclosed income. Appellant failed to prove the creditworthiness with regard to cash. Thus, the source of cash and genuineness of cash transaction worth Rs. 15,00,000/-remains unexplained. Accordingly, this addition is hereby sustained." "5. Sh. Mota Ram Saini, Sikar. Sh. Mota Ram Saini contributed Rs. 2,00,000/- in cash in the assessee's capital. Regarding the above addition the AO submitted in his report dated 16.01.2019 as under:- "Assessee neither produced the person nor any confirmation from Sh. Mota Ram Saini despite providing sufficient time. No documentary ev....
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....stated that he is a tractor mechanic and runs a tractor workshop at Jaipur road, Sikar and having monthly income of Rs. 15,000/-The fund was given to M/s Vijay Group of companies out of past savings. No other supporting documents I were submitted. Copy of statement is enclosed herewith." Sh. lqram submitted before the AO that he runs a tractor workshop at Jaipur road, Sikar and earned monthly income of Rs. 15,000/- and claimed to have given Rs. 1,00,000/- out of this income. However I find no strength in his contention, the same were not supported with documentary evidences of his being able to save such an amount. The appellant produced evidence in support of this contention neither before the AO nor before me. Thus, the source and genuineness of cash transaction worth Rs. 1,00,000/- remained unexplained by the appellant. Thus, this addition is hereby upheld. The appellant company furnished the affidavits with respect to capital introduce by Sh. lqbal and lqram Khan, the merely submissions of affidavit is not enough to discharge the onus cast upon the appellant. Identical issue has been covered by the Hon'ble ITAT, Chandigarh in the case of ACTT vs. Ashok Nay....
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....he assessee, the ld. CIT(A) allowed to the partial relief to the assessee and in respect of 5 members, an amount of Rs. 32,00,000/- was sustained which has been contested by the assessee before us. 8. In case of Sh. Yogindra Singh Chouhan, as against the initial addition of Rs. 51,45,000/- made by AO, the ld. CIT(A) sustained the addition to the extent of Rs. 13,00,000/- for the reason that the genuineness of the cash transactions remained unexplained. It was submitted by the ld. AR that the capital of Rs. 13,00,000/- was introduced on 02.04.2010 however Sh. Yogindra Singh Chouhan was not cooperating with the assessee and the assessee has specifically requested the AO for verification of facts directly from him. However his attendance was not enforced, it was accordingly submitted that no addition should be made in assessee's hands. We find that the Assessing Officer has given adequate opportunity to the assessee during the course of assessment proceedings to furnish the documentation in support of the capital introduction by Sh. Yogindra Singh Chouhan. Further, notice u/s 133(6) was also issued which remained uncomplied with and even during the remand proceedings, there is noth....